BCG

Problem child: cash negative as it tries to increase its market share by advertising, cutting costs or innovating.

Star: higher sales volumes help to cover costs, but it wants to stay in star position (high market share) so has to spend heavily on promotion etc. Revenue is higher but costs still high therefore approximately break even.

Cash cow: high volumes and lots of experience (so low costs and high revenue). Also, the product is perceived as old and on its way out, so competitors don’t mount a high challenge to it. Costs are therefore saved on promotion etc and the cash flow becomes positive.